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Supreme Court Should Not Have Denied Motion to Set Aside a Stipulation of Settlement Without a Hearing, Criteria Explained/Lower Court Properly Considered Issues Raised for the First Time in Plaintiff’s Reply Papers Because Defendant Availed Himself of the Opportunity to Oppose the Contentions at Oral Argument

The Second Department determined Supreme Court should not have denied plaintiff's motion to set aside the stipulation of settlement without a hearing.  The court explained the analytical criteria.  (It is worth noting that the Second Department found that Supreme Court properly considered matters raised for the first time in plaintiff's reply papers because the defendant availed himself of the opportunity to oppose the contentions at oral argument.):

“Marital settlement agreements are judicially favored and are not to be easily set aside” … . However, because of the fiduciary relationship existing between spouses, ” [a] stipulation of settlement should be closely scrutinized and may be set aside upon a showing that it is unconscionable or the result of fraud, or where it is shown to be manifestly unjust because of the other spouse's overreaching'” … .

“To rescind a separation agreement on the ground of overreaching, a plaintiff must demonstrate both overreaching and unfairness” … . ” [N]o actual fraud need be shown, for relief will be granted if the settlement is manifestly unfair to a spouse because of the other's overreaching . . . in its execution'” … . “[C]ourts may examine the terms of the agreement as well as the surrounding circumstances to ascertain whether there has been overreaching” … . However, generally, if the execution of the agreement is fair, no further inquiry will be made … . “[W]hile evidence that one spouse was not represented by counsel is insufficient, standing alone, to find overreaching, it is a significant consideration when determining whether the parties entered into the stipulation freely and fairly” … . “[C]ourts have thrown their cloak of protection [over] separation agreements and made it their business, when confronted, to see to it that they are arrived at fairly and equitably, in a manner so as to be free from the taint of fraud and duress, and to set aside or refuse to enforce those born of and subsisting in inequity” … . Jon v Jon, 2014 NY Slip Op 08961, 2nd Dept 12-24-14

 

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Petitioner, Who Was Not a Biological or Adoptive Parent of the Child, Was Adjudicated a Parent in a Support Proceeding Brought by the Respondent—Under the Doctrine of Judicial Estoppel, Petitioner Was Deemed a Parent in a Subsequent Custody/Visitation Proceeding Brought by the Petitioner

The Second Department determined a determination that petitioner (Arriago) was the child's parent in a support proceeding precluded the respondent (Dukoff) from arguing petitioner was not the child's parent in a subsequent custody/visitation proceeding.  Arriago and Dukoff were domestic partners in a same-sex relationship.  Arriago was artificially inseminated and gave birth to the child.  After successfully seeking child support from Arriago because Arriago was a parent of the child, Dukoff argued that Arriago did not have standing, as neither the biological or adoptive parent, to bring the custody/visitation proceeding.  Family Court disagreed and awarded Arriago visitation:

Dukoff … argues that the court's conclusion that Arriaga had standing to commence this [custody/support] proceeding is contrary to the Court of Appeals' holdings in Debra H. v Janice R. (14 NY3d 576) and Matter of Alison D. v Virginia M. (77 NY2d 651). We disagree with Dukoff's contentions.

Domestic Relations Law § 70(a) provides, in part, that “either parent may apply to the supreme court for a writ of habeas corpus to have such minor child brought before such court; and [the court] may award the natural guardianship, charge and custody of such child to either parent . . . as the case may require” (emphasis added). This statute has also been construed to grant standing to ” either parent'” to apply for a writ of habeas corpus to determine the issue of visitation rights … . In Debra H., the Court of Appeals reaffirmed its holding …  that the term “parent” in Domestic Relations Law § 70 encompasses only the biological parent of a child or a legal parent by virtue of adoption and that a “de facto parent” or “parent by estoppel” could not seek visitation with a child who is in the custody of a fit parent (Debra H. v Janice R., 14 NY3d at 590 [internal quotation marks and emphasis omitted]…). In Debra H., however, the Court analyzed the significance of the civil union the parties had entered into in Vermont prior to the child's birth. The Court determined that, under Vermont law, a child born during a civil union was a child of both partners. Thus, it concluded, Debra H. was the child's parent under Vermont law. As a matter of comity, the Court recognized her as the child's parent under New York law as well, thereby conferring standing for her to seek visitation and custody at a best interests hearing (see Debra H. v Janice R., 14 NY3d at 601).

The Court of Appeals noted that recognizing Debra H. as a parent did not conflict with the public policy of New York and would not “undermine the certainty that Alison D. promises biological and adoptive parents and their children,” since “whether there has been a civil union in Vermont is as determinable as whether there has been a second-parent adoption. And both civil union and adoption require the biological or adoptive parent's legal consent, as opposed to the indeterminate implied consent featured in the various tests proposed to establish de facto or functional parentage” (Debra H. v Janice R., 14 NY3d at 600-601). At the heart of the Court's reasoning in Debra H. was a desire to provide a bright-line rule affording certainty and predictability to parents and children. The Court expressed concern that an equitable estoppel hearing would create protracted litigation on the issue of standing.

In this proceeding, Arriaga asserts that she has standing as a parent of the child pursuant to the doctrine of judicial estoppel. Under that doctrine, ” a party who assumes a certain position in a prior legal proceeding and secures a favorable judgment therein is precluded from assuming a contrary position in another action simply because his or her interests have changed'” … .

The concerns expressed by the Court of Appeals in Debra H. are not implicated in the present case, where Arriaga invoked the doctrine of judicial estoppel, not equitable estoppel. No hearing was required to decide whether the doctrine of judicial estoppel applies in this case, nor did the determination involve a “complicated” or “nonobjective test” (Debra H. v Janice R., 14 NY3d at 594). Just as in Debra H., whether Arriaga was adjudicated a parent of the child was “as determinable as whether there has been a second-parent adoption” (id. at 600).

Moreover, just as in second-parent adoptions, the adjudication of Arriaga as a parent of the child required the biological mother's affirmative legal consent, “as opposed to the indeterminate implied consent featured in the various tests proposed to establish de facto or functional parentage” (id. at 600-601). Indeed, here, Dukoff was the party who sought to have Arriaga adjudicated a parent. Although Dukoff did not consent to adjudicating Arriaga a parent of the child for the purposes of visitation rights, the biological mother in Debra H. also did not do so.  Matter of Arriaga v Dukoff, 2014 NY Slip Op 08990, 2nd Dept 12-24-14

 

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Plaintiff-Resident of an Adult Care Facility Did Not Have Standing to Object to An Informal Procedure Used by the Department of Health (DOH) Re: the Inspection of Adult Care Facilities (Affording a Meeting Between the Facility and DOH Prior to the Publication of an Inspection Report)—Standing to Challenge Governmental Action Discussed in Some Depth

The First Department determined that the plaintiff in a class action suit did not have standing to object to a procedure used by the Department of Health (DOH) re: its inspection of adult care facilities.  Plaintiff is a resident of an adult care facility. The DOH inspection review process (IRP) affords the operators of adult care facilities the opportunity for an informal one-hour meeting with DOH staff after an inspection report is drafted but before it is published.  Plaintiff alleged the informal meeting was not authorized by any regulation and hampered residents' rights re: grievances against a residential care facility:

Since plaintiff is challenging DOH's implementation of the IRP, a governmental action, he must establish that he has standing to do so by showing an “injury in fact,” meaning that plaintiff will actually suffer harm by the challenged administrative action and that the injury asserted by him falls “within the zone of interests or concerns sought to be promoted or protected by the statutory provision under which the agency has acted” … . The alleged injury or harm must also be in some way different from that of the public at large … .

Although plaintiff alleges that the IRP process favors adult home operators by allowing them to privately address adverse findings or corrective actions DOH identifies, without any input by residents of the adult home, plaintiff does not otherwise articulate how he is disadvantaged by this process, how the outcomes of some of these investigations would have been different had residents been permitted to participate in the IRP, or that the substandard living conditions or mistreatment he complains of are attributable to DOH's implementation of the IRP. The only “injury” plaintiff alleges is that resolution of residents' complaints are delayed when an adult home operator contests the outcome of an investigation and residents are not aware of or notified that any particular complaint is subject to an IRP. These allegations are far too generalized and speculative to satisfy the “injury in fact” requirement that would confer plaintiff with standing to challenge the procedures DOH has implemented … . Plaintiff does not articulate any harm or injury that he will suffer that is in some way an identifiable interest of his own, different from that of the public at large… .

Plaintiff and the members of the proposed class of adult home residents are also outside the “zone of interests” sought to be protected by the applicable statutory and regulatory framework under which the agency has acted … . DOH is vested with the authority to establish the procedures by which complaints are investigated and violations corrected (see Social Services Law § 461-o, 18 NYCRR § 486.2[a]). Moreover, DOH's enforcement powers are exceedingly broad, ranging from the imposition of civil penalties to the revocation, suspension or limitation of an operating certificate, after a hearing. DOH can even request that the Attorney General seek injunctive relief or criminally prosecute an operator for any violation or threatened violations of law or regulation (see SSL § 460—d; 18 NYCRR § 486.4[b]; see also 18 NYCRR §§ 486.4[b]-[h]). The governing regulatory scheme–which plaintiff does not challenge–plainly contemplates dialogue between DOH and adult home operators during the inspection process. Rather than providing for universal participation by residents in that process, they are expressly excluded from disclosure of investigation outcomes that are being contested by the operator (see Social Services Law §§ 461-a[1], [2][b], [2][c]; 461-d[3][b], [c], [g]; 461-o; 18 NYCRR 486.2[o]). The IRP is, therefore, wholly consistent with the enabling statutes. Bloomfield v Cannavo, 2014 NY Slip OP 08902, 1st Dept 12-23-14


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Complaint Can Not Be Deemed a Late Notice of Claim/Application to File a Late Notice of Claim Can Not Be Granted After the Statute of Limitations Has Run/City Is Not Required to Plead the Failure to File a Notice of Claim as a Defense/Participation in Discovery Did Not Preclude the City from Moving to Dismiss Based Upon Plaintiff’s Failure to File a Notice of Claim (After the Statute of Limitations Had Run)

The Second Department reversed Supreme Court’s determination that the complaint be deemed a late notice of claim against the city in a slip and fall case.  The court noted that Supreme Court did not have the power to accept the complaint as a late notice of claim, did not have the power to grant an application to file a late notice of claim after the statute of limitations had passed, the city was under no obligation to plead the absence of a notice of claim as a defense, and the city was not precluded from raising the defense by participating in discovery:

Here … the Housing Authority … was “under no obligation to plead, as an affirmative defense, the plaintiff’s failure to comply with the statutory notice of claim requirement” … . “Furthermore . . . participation in pretrial discovery did not preclude [it] from raising the untimeliness of the notice of claim” … . In short, there is no evidence in the record demonstrating that the Housing Authority engaged in any misleading conduct which would support a finding of equitable estoppel … . Furthermore, there is no indication in the record that the plaintiff relied upon any alleged act or omission of the Housing Authority or that such reliance caused the plaintiff to change her position to her detriment or prejudice … . Accordingly, the Supreme Court should have granted the Housing Authority’s motion for summary judgment dismissing the complaint on the ground that the plaintiff failed to serve a timely notice of claim, and denied that branch of the plaintiff’s cross motion which was to deem the complaint to be a late notice of claim and to deem it to have been timely served nunc pro tunc.  Feliciano v NYC Hous Auth, 2014 NY Slip OP 08807, 2nd Dept 12-17-14

 

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In the Absence of Allegations in the Pleadings Supporting an “Espinal” Exception to the Rule that Tort Liability to Third Persons Does Not Arise from a Contract, No Question of Fact Was Raised About a Duty Owed by the Defendant to the Plaintiff

The Second Department determined the complaint in a slip and fall case was properly dismissed.  There apparently was a contract between the defendant cleaning services company, One-A, and plaintiff’s employer.  Plaintiff slipped and fell on a wet floor. The court explained the Espinal criteria for tort liability to third parties arising from a contract and then found that, because plaintiff was not a party to the cleaning-services contract, the cleaning-services company did not owe her a duty of care:

Generally, a contractual obligation, standing alone, will not give rise to tort liability in favor of a third party … . Nonetheless, the Court of Appeals has recognized three exceptions to this general rule: (1) where the contracting party, in failing to exercise reasonable care in the performance of his or her duties, launches a force or instrument of harm; (2) where the plaintiff detrimentally relies on the continued performance of the contracting party’s duties; and (3) where the contracting party has entirely displaced another party’s duty to maintain the premises safely … . As part of its prima facie showing, a contracting defendant is only required to negate the applicability of those Espinal exceptions that were expressly pleaded by the plaintiff or expressly set forth in the plaintiff’s bill of particulars … . Here, given the allegations in the complaint and the plaintiff’s bill of particulars, One-A established its prima facie entitlement to judgment as a matter of law simply by offering sufficient proof that the plaintiff was not a party to its contract to clean the floor of the premises, and that it thus owed her no duty of care … . In opposition, the plaintiff failed to raise a triable issue of fact … . Glover v John Tyler Eters Inc, 2014 NY Slip Op 08809, 2nd Dept 12-17-14

 

Motion for a Change of Venue Made in the Wrong County–Statutory Procedure Explained

The Second Department determined that, given plaintiff’s response to the demand to change venue, defendants’ motion for a change of venue should have been made in the county where action was pending.  The court explained the applicable law:

“CPLR 511(b) provides a mechanism pursuant to which a defendant may serve a demand to change the place of a trial upon the ground of improper venue to a county the defendant specifies as being proper” … . If the plaintiff does not consent to the change, “the defendant may move to change the place of trial within fifteen days after service of the demand” (CPLR 511[b]). The defendant may notice such motion to be heard as if the action were pending in the county he or she specified, unless the plaintiff, within five days after service of the demand, serves an affidavit showing either that the county specified by the defendant is not proper or that the county designated by the plaintiff is proper (see id.).

Here, in response to the defendants’ demand to change venue, the plaintiff timely served an affidavit of her attorney containing factual averments that were prima facie sufficient to show that the county designated by her was proper (see CPLR 503[a]; 511[b]…). Accordingly, the defendants’ motion pursuant to CPLR 510(1) should have been made in the Supreme Court, Kings County, where the action was pending, and the Supreme Court, Nassau County, erred in granting the motion … .  King v CSC Holdings LLC, 2014 NY Slip OP 08813, 2nd Dept 12-17-14

 

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Criteria for Accelerated Relief Re: a Promissory Note Explained–Conclusory Allegations of Fraud in the Inducement Insufficient to Defeat Summary Judgment

Reversing Supreme Court, the Second Department determined plaintiff was entitled to accelerated summary judgment on a promissory note because the defendant’s conclusory allegations of fraud in the inducement were not sufficient to defeat the motion.  The court explained the availability of accelerated relief:

“Pursuant to CPLR 3213, a party may obtain accelerated relief by moving for summary judgment in lieu of complaint, provided that the action is based upon an instrument for the payment of money only or upon any judgment'” … . ” A promissory note is an instrument for the payment of money only, provided that it contains an unconditional promise by the borrower to pay the lender over a stated period of time'” … . “An instrument does not qualify for accelerated relief under CPLR 3213 if outside proof is needed, other than simple proof of nonpayment or a similar de minimis deviation from the face of the document'” … . “Therefore, a plaintiff makes a prima facie showing of entitlement to judgment as a matter of law pursuant to CPLR 3213 by showing that the defendant executed the subject instrument, the instrument contains an unconditional promise to repay the plaintiff upon demand or at a definite time, and the defendant failed to pay in accordance with the instrument’s terms” … . Once the plaintiff establishes its prima facie entitlement to judgment as a matter of law, the burden shifts to the defendant to submit admissible evidence to establish the existence of a triable issue of fact with respect to a bona fide defense … .

Here, the plaintiff established its prima facie entitlement to judgment as a matter of law by showing that the defendant executed the subject instruments, which contained unconditional promises to repay the plaintiff upon demand or at a definite time, and the defendant failed to pay in accordance with the terms of the instruments … . Contrary to the Supreme Court’s determination, in opposition, the defendant failed to establish the existence of a triable issue of fact with respect to a bona fide defense. The defendant claimed that the plaintiff fraudulently induced it to execute the promissory notes. However, the evidence submitted by the defendant failed to raise a triable issue of fact in this regard. Moreover, the defendant’s conclusory allegations of fraud were insufficient to defeat the plaintiff’s entitlement to summary judgment … . Sun Convenient Inc v Sarasamir Corp, 2014 NY Slip Op 08827, 2nd Dept 12-17-14

 

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Bank Properly Sanctioned for Not Negotiating in Good Faith in Mandatory Foreclosure Settlement Conferences

The Second Department determined plaintiff bank had not negotiated in good faith in the mandatory foreclosure settlement conferences (required by CPLR 3408(f)).  The bank was sanctioned by precluding it from collecting interest on the mortgage for a period of several months:

Pursuant to CPLR 3408(f), the parties at a mandatory foreclosure settlement conference are required to negotiate in good faith to reach a mutually agreeable resolution (see CPLR 3408[f]; Wells Fargo Bank, N.A. v Meyers, 108 AD3d 9, 11). ” The purpose of the good faith requirement in [CPLR 3408] is to ensure that both plaintiff and defendant are prepared to participate in a meaningful effort at the settlement conference to reach resolution'” (US Bank N.A. v Sarmiento, 121 AD3d 187, 200, quoting 2009 Mem of Governor’s Program Bill, Bill Jacket, L 2009, ch 507, at 11). To conclude that a party failed to negotiate in good faith pursuant to CPLR 3408(f), a court must determine that “the totality of the circumstances demonstrates that the party’s conduct did not constitute a meaningful effort at reaching a resolution” … .

Here, the totality of the circumstances supports the referee’s finding that the plaintiff failed to negotiate in good faith. The referee’s finding was based, in part, upon the plaintiff’s failure to follow guidelines pursuant to the federal Home Affordable Mortgage Program (hereinafter HAMP). The applicable guidelines required the plaintiff, as a lender participating in HAMP, to attempt to obtain a waiver of an investor prohibition or restriction in lowering the interest rate and to keep such evidence in the loan file (see Making Home Affordable Program, Handbook for Servicers of Non-GSE Mortgages, version 4.0, ch 2, § 6.5 at 99 [August 17, 2012]). However, despite repeated requests by the referee to produce evidence that the plaintiff attempted to obtain a waiver of the investor’s restrictions in the PSA, the plaintiff failed to do so for more than one year. Therefore, the plaintiff failed to demonstrate that it followed HAMP regulations and guidelines, which, as several trial courts have concluded, constitutes a failure to negotiate in good faith pursuant to CPLR 3408(f)… . US Bank NA v Smith, 2014 NY Slip Op 08832, 2nd Dept 12-17-14

 

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Only Parties “Aggrieved Within the Meaning of CPLR 5511” May Appeal

In finding that the appeal must be dismissed because the appellant was not “aggrieved within the meaning of CPLR 5511,” the Second Department explained the meaning of “aggrieved” in this context:

“A person is aggrieved within the meaning of CPLR 5511 when he or she asks for relief but that relief is denied in whole or in part,’ or, when someone asks for relief against him or her, which the person opposes, and the relief is granted in whole or in part'” … . Saccheri v Cathedral Props Corp, 2014 NY Slip OP 08821, 2nd Dept 12-17-14

 

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Article 78 Is Proper Mechanism for Seeking Return of Property Held by the Police Department/Here Petitioner Was Not Entitled to Return of Firearm Not Licensed in New York/Firearms Owners’ Protection Act Did Not Apply

The Second Department determined that, although an Article 78 proceeding can be used to seek the return of property from the police department, the proceeding can not be used to seek the return of contraband.  Under the facts here, the firearm at issue was contraband because the petitioner did not have a license to possess it in New York, in spite of the fact the firearm had been legally purchased and possessed in California. In addition, the court held that the petitioner was not simply transporting the firearm through New York, an act protected by the Firearms Owners’ Protection Act (18 USC 926A):

Under the circumstances of this case, the Supreme Court correctly determined that the Firearm Owners’ Protection Act (18 USC § 926A) was not applicable. “Section 926A permits a licensee, in certain circumstances, to transport a firearm from any place where he may lawfully possess and carry such firearm to any other place where he may lawfully possess and carry such firearm'” … . The firearm owner must be actually engaging in travel or acts incidental to travel …, and during the transportation, the weapon and ammunition must not be readily accessible … . Here, the petitioner failed to establish that he was only engaged in travel through New York so as to invoke the protection of section 926A … . Matter of Khoshneviss v Property Clerk of NYC Police Dept, 2014 NY Slip Op 08844, 2nd Dept 12-17-14

 

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